Canada Business News Archives

Hurting Canada’s reputation – Castanet.net

The Canadian Press – Nov 25, 2016 / 5:57 am | Story: 181916

Photo: The Canadian Press

Canada’s pipeline gridlock is harming its global reputation as an attractive place to invest in oil and gas projects, says a leading industry group.
Tim McMillan,…

ontheleft-new

Is the viability of Barbados’ international business sector under threat?

 

The economically important international business and financial services sector faces risks in light of heightened global concerns. Growth in the sector – which is second in importance after tourism – has been stagnant since the onset of the global financial crisis because of regulatory changes in other jurisdictions, mainly Canada, which is the source of much of Barbados’ offshore business.

From 2001-2008, direct employment in the sector nearly doubled, from about 2 000 to over 4 000, the majority of which were locals.

The sector also became an important part of the tax base, with its contribution to Government revenues rising from 12 to 34 per cent over the same period, a 229 per cent increase from 2001 to 2007 (the peak in tax earnings), or about 22 per cent per annum.

While the global financial crisis reduced earnings and increased uncertainty, legislative changes in Canada would appear to be a key factor in the sector’s stagnation in more recent years.

Canadian companies account for approximately 80 per cent of all the business conducted in the international business and financial services sector.

Hence, changes in Canadian legislation have a particularly strong impact on it.

Two significant changes have occurred: In 2007, Canada extended its favourable “exempt surplus” tax treatment of foreign affiliates in tax-treaty countries to all jurisdictions that sign tax information exchange agreements (TIEAs).

Prior to this, Barbados had been the main destination for Canadian business investment, but the changes made other jurisdictions with lower or no taxes and a TIEA more attractive.

In response, Barbados reduced its taxation rates to remain competitive, lowering the top marginal tax rate on international business companies from 3 per cent to a range of rates from 0.25 per cent to 2.5 per cent in 2012 and 2013.

As of January 1, 2015, the Canadian government strengthened the integrity of exemption under its foreign accrual property income regime to limit the erosion of its tax base, thereby reducing the benefit of holding companies in Barbados and other favourable tax jurisdictions.

This also impacted the trust sector, which had been one of the island’s growth areas.

As a result of the Canadian legislative changes, combined with developments following the global financial crisis, such as advanced economies’ concerns over tax compliance and increased scrutiny of offshore banking centres in general, growth of the IBFS has been stagnant.

Employment has remained relatively stable since 2009 and the number of registered companies has remained at around 4 000.

Moreover, direct Government revenues have significantly declined, from $356 million in 2007 to $97 million in 2013. This represents a loss of about three per cent of GDP.

Growth prospects remain clouded.

While the sector continues to be the second most important, global competition from other offshore jurisdictions, as well as efforts from advanced economies to reduce tax arbitrage, remain challenges.

Most recently, withdrawal of correspondent banking relationships, or more broadly, “de-risking” is creating new uncertainty.

The Government continues to support the industry, including with its effort to sign double taxation agreements (18 since 2010), as well as to reform business practices and legislation, to remain competitive.

Bruce Cheadle, The Canadian Press

OTTAWA — Canadian corporate executives whose companies together employ more than a million people are urging Prime Minister Justin Trudeau and the premiers to press ahead with collective climate action, including …

WINNIPEG, Manitoba • Canada may ban an insect-killing chemical used to protect crops because it harms aquatic bugs, including midges and mayflies, while the government continues to investigate whether imidacloprid poses a risk to bees.

Imidacloprid, made by Bayer AG, should be phased out within five years, the Pest Management Regulatory Agency (PMRA) said on Wednesday.

Imidacloprid is part of a class of pesticides called neonicotinoids, also called neonics, that are applied as a seed treatment or sprayed on plants’ leaves. Neonics have drawn scrutiny in recent years after research pointed to risks for honey bees, which have been in serious decline in North America, possibly due to pesticides, loss of habitat and climate change.

The European Union limited use of neonics, including imidacloprid, two years ago. There is no such ban anywhere in North America yet, said Scott Kirby, director general of environmental assessment at PMRA.

Bayer, the biggest imidacloprid manufacturer, is “extremely disappointed” in the decision, said Bayer Canada Vice President Derrick Rozdeba, in a statement.

“Canadian growers value imidacloprid due to its efficacy, safety to applicators and favorable environmental profile, when used according to label instructions,” he said.

The recommendation is a surprise, said Dave Carey, manager of government affairs and policy at Canadian Seed Trade Association, whose members include seed suppliers Syngenta AG and Monsanto Co.

“There are always concerns when a product that companies and growers rely on is taken off the market,” Carey said.

Monsanto treats most of its soybean varieties with imidacloprid, spokeswoman Trish Jordan said.

Ron Bonnett, president of Canadian Federation of Agriculture, said phasing out the chemical may not cause problems for farmers because other neonics are still available.

“I don’t see a lot of red flags right now,” he said.

The government will now hold a consultation period on the change before PMRA makes its final decision next year.

The regulatory agency is also reviewing two other neonics, clothianidin and thiamethoxam.

The move was greeted with cautious optimism by Canadian beekeepers, who have been concerned about a possible link between neonics and spikes in bee deaths.

Phasing out imidacloprid may result in fewer bee deaths, but it depends on what chemicals farmers replace it with, said Rod Scarlett, executive director of Canadian Honey Council.

Environmental Defence, an activist group, said the decision is welcome, but the phase-out is unnecessarily long.  

Business Briefing from St. Louis Post-Dispatch

Make it your business. Get twice-daily updates on what the St. Louis business community is talking about.

OTTAWA – A former Liberal cabinet minister and leader of a major Canadian business group says Donald Trump’s impending presidency poses an economic threat to Canada that’s on par with the 9/11 attacks on the United States.

John Manley, the president of the Business Council of Canada, is urging the Liberal government to respond to Trump’s anti-trade rhetoric in order to keep goods and people flowing across the busiest border in the world.

“This is existential for Canada. This is the heart that beats (in) our economy so we just can’t get this wrong,” Manley said in an interview Wednesday.

“We have to see it as the same … almost existential threat that 9/11 was.”

Earlier this week, Trump released a YouTube video vowing to withdraw the U.S. from the 12-country Trans-Pacific Partnership.

He was silent on the future of the North American Free Trade Agreement, but has repeatedly called it a disaster that either needs to be scrapped or renegotiated.

Manley, a Liberal cabinet minister during 9/11, says the TPP is now dead and can’t be resurrected, but he says he has urged the government to move quickly to preserve Canada’s trading relationship with the U.S. under NAFTA.

Manley says lessons can be learned from the Smart Border agreement, which he helped broker with then-U.S. homeland security secretary Tom Ridge after 9/11 to improve security without impeding the flow of $2 billion a day in two-way trade.

Manley was the Liberal cabinet minister in charge of Canada-U.S. relations following the attacks of Sept. 11, 2001, which initially halted trade across the 49th parallel amid concerns in Washington that Canada was a launch pad for terrorists.

Manley said it is likely Trump hasn’t given much thought to Canada because he has been preoccupied with the other NAFTA partner, Mexico. He said Canada has to avoid being “sideswiped” by any future action Trump might take against Mexico.

He said it is up to the government to divine what Trump’s plans are for Canada and to propose solutions for any concerns he might have. He said there is a parallel with Canada’s reaction to 9/11.

Manley led an effort to craft the 30-point smart border plan, which Ridge signed on a trip to Ottawa in December 2001. The Canadian side, he said, devised those 30 points and got the Americans to agree.

“It filled an agenda vacuum for them that they were able to sign onto because they clearly needed to deal with risks and security at the border.”

Manley said the government needs to address one potential point of concern: the fact that U.S. corporations have $27 billion in deposits in various Canadian financial institutions.

That’s because Trump has said he wants to find ways to persuade American companies with money parked in foreign countries to return it to the United States. He has dangled tax breaks as an incentive.

“He says he’s going to get that money home. Do the multiplier on what that level of deposits coming out of Canadian financial institutions means to liquidity in Canada,” said Manley.

The death of the TPP diminishes U.S. influence in Asia, which will also have negative effects for Canada, he said.

He said that will allow China to fill the void created by the U.S. departure, allowing them to take the lead on making trade rules in the region.

Not all Canadian business leaders are mourning the death of the TPP or sounding the alarm on NAFTA.

Mathew Wilson, senior vice president of Canadian Manufacturers and Exporters, questioned whether some of the smaller TPP countries in Asia were ever truly interested in “equal trade” with larger TPP economies such as Canada.

Canada needed to guard against “not just opening our doors for an in-flow of goods without getting the ability to access those foreign markets,” he said.

Wilson said he believes Trump will come appreciate the deeply integrated nature of the Canada-U.S. economic relationship once he’s fully briefed.

OTTAWA – A former Liberal cabinet minister and leader of a major Canadian business group says Donald Trump’s impending presidency poses an economic threat to Canada that’s on par with the 9/11 attacks on the United States.

John Manley, the president of the Business Council of Canada, is urging the Liberal government to respond to Trump’s anti-trade rhetoric in order to keep goods and people flowing across the busiest border in the world.

“This is existential for Canada. This is the heart that beats (in) our economy so we just can’t get this wrong,” Manley said in an interview Wednesday.

“We have to see it as the same … almost existential threat that 9/11 was.”

Earlier this week, Trump released a YouTube video vowing to withdraw the U.S. from the 12-country Trans-Pacific Partnership.

He was silent on the future of the North American Free Trade Agreement, but has repeatedly called it a disaster that either needs to be scrapped or renegotiated.

Manley, a Liberal cabinet minister during 9/11, says the TPP is now dead and can’t be resurrected, but he says he has urged the government to move quickly to preserve Canada’s trading relationship with the U.S. under NAFTA.

Manley says lessons can be learned from the Smart Border agreement, which he helped broker with then-U.S. homeland security secretary Tom Ridge after 9/11 to improve security without impeding the flow of $2 billion a day in two-way trade.

Manley was the Liberal cabinet minister in charge of Canada-U.S. relations following the attacks of Sept. 11, 2001, which initially halted trade across the 49th parallel amid concerns in Washington that Canada was a launch pad for terrorists.

Manley said it is likely Trump hasn’t given much thought to Canada because he has been preoccupied with the other NAFTA partner, Mexico. He said Canada has to avoid being “sideswiped” by any future action Trump might take against Mexico.

He said it is up to the government to divine what Trump’s plans are for Canada and to propose solutions for any concerns he might have. He said there is a parallel with Canada’s reaction to 9/11.

Manley led an effort to craft the 30-point smart border plan, which Ridge signed on a trip to Ottawa in December 2001. The Canadian side, he said, devised those 30 points and got the Americans to agree.

“It filled an agenda vacuum for them that they were able to sign onto because they clearly needed to deal with risks and security at the border.”

Manley said the government needs to address one potential point of concern: the fact that U.S. corporations have $27 billion in deposits in various Canadian financial institutions.

That’s because Trump has said he wants to find ways to persuade American companies with money parked in foreign countries to return it to the United States. He has dangled tax breaks as an incentive.

“He says he’s going to get that money home. Do the multiplier on what that level of deposits coming out of Canadian financial institutions means to liquidity in Canada,” said Manley.

The death of the TPP diminishes U.S. influence in Asia, which will also have negative effects for Canada, he said.

He said that will allow China to fill the void created by the U.S. departure, allowing them to take the lead on making trade rules in the region.

Not all Canadian business leaders are mourning the death of the TPP or sounding the alarm on NAFTA.

Mathew Wilson, senior vice president of Canadian Manufacturers and Exporters, questioned whether some of the smaller TPP countries in Asia were ever truly interested in “equal trade” with larger TPP economies such as Canada.

Canada needed to guard against “not just opening our doors for an in-flow of goods without getting the ability to access those foreign markets,” he said.

Wilson said he believes Trump will come appreciate the deeply integrated nature of the Canada-U.S. economic relationship once he’s fully briefed.

The government of Canada will negotiate to buy 18 new F/A-18 Super Hornet fighters from Boeing, a move that would keep the fighter’s production line in St. Louis operating into the early 2020s.

These aircraft will fill a “capability gap” until Canada can replace its current CF-18 fighter fleet, Canadian officials said at a press conference held Tuesday in Ottawa. 

Canada also will launch a “wide-open and transparent” competition to replace Canada’s aging CF-18 fleet, Defense Minister Harjit Sajjan said.

The announcement marks a win by Boeing over Lockheed Martin, its archrival in the fighter business.

The previous Conservative government of Canada had planned to buy 65 Lockheed F-35s, the newest fighter in the American arsenal. 

But the cost of the procurement, initially pegged at 9 billion Canadian dollars with a total project cost of CA$16 billion, kept rising as the Canadian dollar lost ground against the U.S. dollar and government estimates were revised. During last year’s national election contest, the Liberal Party of current Prime Minister Justin Trudeau labeled the F-35 as too expensive.

Canada wants to replace its fleet of 77 CF-18s, an earlier version of the Hornet built in the 1980s. That fleet is no longer capable of fulfilling Canada’s duty to NATO and to North American air defense at the same time, Canadian defense officials say.

The new F/A-18s will fill the gap while Canada launches a competition for a new aircraft, an effort which may take five years. The F/A-18 has advantages in “interoperability” with the U.S. Air Force in the defense of North America, Canadian officials said.

Canada will negotiate with Boeing over price, with the intention of having some of the work done in Canada, Canadian officials said.

The Pentagon is paying about $70 million each for F/A-18 Super Hornets. At that price, the Canadian purchase would be worth $1.26 billion.

The Pentagon plans to spend nearly $400 billion to buy nearly 2,500 F-35s for the Air Force, Navy and Marines. Canada will continue to play a role in developing the F-35, Canadian officials said.

The likely Canadian order is the second piece of recent good news for Boeing’s St. Louis-based fighter business, which also produces the F-15 Strike Eagle and the E/A-18 Growler. The White House in September approved the $7 billion sale of F/A-18s to Kuwait and F-15s to Qatar.

Those orders were enough to keep the F/A-18 line operating into 2020 and the F-15 line into the next decade.

Boeing employs nearly 15,000 people in St. Louis.

The potential Canadian order drew praise from the St. Louis area’s congressional delegation.

“I am optimistic that this potential deal between Boeing and Canada will continue to increase jobs and boost the St. Louis economy,” said Rep. Ann Wagner, R-Ballwin. She said she is working to win approval in Congress for more Super Hornets that the Navy says it needs.

The House passed a defense bill appropriating up to 16 more Super Hornets for the Navy in June, but unrelated differences over funding overseas wars in the Senate have held up congressional negotiators. The current budget for would pay for two more in 2017.

Sen. Claire McCaskill, D-Mo., said that Canada’s interest “is even more evidence of the vital role Missouri’s workforce plays in national defense — both at home and for our strategic allies around the world.

“The Super Hornets are an incredibly valuable asset, and Canada’s investment in American-made fighter jets would mean great news for our state’s economy and for the security of the U.S. and our allies.”

Sen. Roy Blunt, R-Mo., agreed, saying that “an opportunity for an increase in Super Hornet production is great news for the hardworking skilled workers of St. Louis.”

Chuck Raasch of the Post-Dispatch contributed to this report.

Business Briefing from St. Louis Post-Dispatch

Make it your business. Get twice-daily updates on what the St. Louis business community is talking about.

Jim Gallagher • 314-340-8390

jgallagher@post-dispatch.com

@JimGallagher14 on Twitter

Except for the people who gave up years of their lives negotiating it, there will be few tears in Canada or the United States for the Trans-Pacific Partnership.

But after what seems like the final collapse of a seven-year process to co-ordinate trade rules between Canada, the U.S., Japan and a group of nine other nations around the Pacific, what path will world trade take next?

In a very Trumpian innovation, the president-elect announced his new policy by video. And he declared that one of his first acts as president will be to KO the TPP.

‘Potential disaster’

“I’m going to issue a notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for this country,” Donald Trump said, speaking his lines straight into the camera.

“Instead we will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores.”

Even those who were disappointed were not surprised at the demise of the TPP. But it may just be a first step.

“It’s a very perplexing time,” says Robert Wolfe, whose new book, Redesigning Canadian Trade Policies for New Global Realities, may already be in need of a few extra chapters.

APEC-SUMMIT/

U.S. President Barack Obama and Japanese Prime Minister Shinzo Abe were key supporters of the TPP, but now Japan will be negotiating with a tough-talking Trump administration. (Kevin Lamarque/Reuters)

 ”With any new president you don’t actually know what they’re going to do until they start doing it,” says Wolfe,

The jobs of treasury secretary, U.S. trade representative and commerce secretary are still vacant, but with a prospective defence job filled by someone with the nickname “Mad Dog” and a leading environment post filled by someone who reportedly doesn’t believe in science, future U.S. trade policy may be more uncertain than usual.

‘We just don’t know’

“You can both say, ‘It’s not that bad’ or ‘Be very, very afraid,’ and we just don’t know,” says Wolfe.

Wolfe says there are some things Canada would like to have in TPP, but the loss of the deal will be “a catastrophe” for the U.S. The reason, he says, is that by cancelling the deal the U.S. will lose credibility in Asia.

Others have said that by dumping TPP, Trump has handed more trade power to China.

In what seems to be an ever-changing presidential policy landscape, Wolfe wonders if Trump will cancel the TPP only to “put lipstick on it” and bring it back in another form.

If he’s right, watch out for the forthcoming Trump Pacific Partnership.

USA-TRUMP/

Trump says he is seriously considering retired marine general James (Mad Dog) Mattis for the job of defence secretary, but trade ministers remain unnamed. (Mike Segar/Reuters)

Trade lawyer Katie Sykes says it’s as if the world of trade has turned upside down in a few months.

“We seem to be in a time when what was pretty well-established received wisdom about trade is in flux right now. The Trump victory is the biggest manifestation,” says Sykes, a professor at Thompson Rivers University in Kamloops, B.C.

She says a 10-year trend to move beyond the World Trade Organization structure toward even closer integration of trade rules — what are called “mega-regional” deals such as TPP, CETA and TTIP — has simply gone off the rails. CETA, Canada’s deal with Europe, remains the only survivor.

But while much of the world has turned against trade, she says that Canada is one country unlikely to turn protectionist. Instead, it will become a global cheerleader for trade.

“It’s so important to our economy,” she says.  

“How is it going to affect us if there is a general global move toward more protectionism and more isolationism? Anyone who’s studied trade history in the 1930s finds that a chilling prospect,” says Sykes.

Public consultation missing

Part of the problem with TPP and the other mega-regional trade deals was the way they were negotiated, according to Barry Appleton, the managing partner at trade law firm Appleton & Associates. 

“Having sophisticated long negotiations that last for seven years and not having public consultations is not a very good way to conduct public policy,” says Appleton. “And it’s not surprising when the deal finally comes out people don’t like it.”

For the political elite, Trump may have come across as unpolished. Others talked down his skills as a businessman. But Appleton says Trump really does understand the art of the business deal. And trade is one of the areas where that is going to pay off.

Three Amigos 20160629

Mexican President Enrique Pena Nieto, Prime Minister Justin Trudeau and U.S. President Barack Obama shake hands in June, but now Trump has threatened to rip up the North American Free Trade Agreement. (Fred Chartrand/Canadian Press)

“One should never underestimate Donald Trump,” says Appleton, a dual national who has offices in Toronto and Washington.

He says with Trump in the White House the rules of trade have changed. Trump will want to get something concrete for everything he gives up.

And he says Prime Minister Justin Trudeau’s strategy, which he describes as showing Canada’s hand on NAFTA, is something Trump will take advantage of.

“Tremendous mistake,” he says. “Tremendous mistake.”

“What the government needs is a real good fresh entrepreneurial approach to deal with Mr. Trump,” says Appleton. 

“The thoughtful, academic, scholarly way, which was very appropriate under the Obama administration, is unlikely to be the way that things proceed in the Trump administration.”

Follow Don on Twitter @don_pittis

More analysis by Don Pittis

 Page 1 of 35  1  2  3  4  5 » ...  Last » 
This site is protected by WP-CopyRightPro